U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                -----------------

                                   FORM 10-QSB

/X/      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2005

/ /      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                        Commission file number: 001-32134
                                                ---------

                           CIRCLE GROUP HOLDINGS, INC.
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

            ILLINOIS                                         36-4197173
 -------------------------------                        ------------------
 (State or Other Jurisdiction of                         (I.R.S. Employer
  Incorporation or Organization)                        Identification No.)

                  1011 CAMPUS DRIVE, MUNDELEIN, ILLINOIS 60060
                  --------------------------------------------
                    (Address of Principal Executive Offices)

                                 (847) 549-6002
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

     Check whether the issuer:  (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                                 Yes / /       No /X/

      The registrant has a single class of common stock, par value $.00005 per
share, of which there are 44,719,559 shares issued and outstanding as of
March 31, 2005.

         Transitional Small Business Disclosure Format (Alternative 2):

                                 Yes / /       No /X/


<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

     See Consolidated Financial Statements beginning on page F-1.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The following discussion is intended to assist in understanding the
financial condition and results of operations of Circle Group Holdings, Inc. You
should read the following discussion along with our financial statements and
related notes included in this Form 10-QSB. The following discussion contains
forward-looking statements that are subject to risks, uncertainties and
assumptions. Our actual results, performance and achievements in 2005 and beyond
may differ materially from those expressed in, or implied by, these forward
looking statements.

OVERVIEW

     We are a pioneer of emerging technology companies. We provide small
business infrastructure, funding and substantial intellectual capital to bring
important and timely life-changing technologies to the marketplace through all
phases of the commercialization process.

     Circle Group Holdings, Inc. was founded in May 1994 under the original
name, Circle Group Entertainment Ltd. and changed its name to Circle Group
Holdings, Inc. in 2002. We had no business operations except for research and
development activities between May 1994 and January 1997. In 2002, we
reorganized our business units into three reportable segments: food product
development, security product development, and e-tailor, and acquired Fiber-Gel
Technologies, Inc., which owns an exclusive license to Z-Trim, an all-natural,
corn and other grain-based fat replacement.

     We have four operating subsidiaries: Fiber-Gel Technologies, Inc.,
thebraveway.com, Inc., operating as The Brave Way Training Systems, On-Line
Bedding Corp., and Z-Amaize Technologies, Inc., and have exclusive worldwide
licenses to the Nutrition Analysis Tool website, Mini-Raman Lidar System, and
ThraxVac technology.

RECENT MATERIAL DEVELOPMENTS

     On August 25, 2004, we commemorated the opening of our new production
facility in Mundelein, Illinois with an official ribbon cutting ceremony. At
full capacity, this eco-compliant facility is capable of producing up to ten
million pounds annually of Z-Trim(TM). In addition, this facility is also
capable of producing up to ten million gallons of Z-Bind(TM) adhesive resin and
polymer extenders for use by the plywood, concrete and construction industries.

     In September 2004, we entered into an agreement with Gassman Engineers,
Inc. and Meridian Mechanical Corporation to develop a commercial version of our
Lidar(TM) and ThraxVac(TM) technologies, which were originally developed at the
U.S. Department of Energy's Brookhaven National Laboratory.

     On September 28, 2004, Z-Amaize Technologies signed an agreement to provide
NOVOC Performance Resins with Z-Bind for use in its products. NOVOC has
identified a use for a neutral pH version of Z-Bind in which they could use up
to several million pounds per year once fully commercialized, The agreement also
provides for the joint development of additional versions of Z-Bind.

     In September 2004, Z-Amaize Technologies, entered into a three-year
agreement with Senticore, Inc. to supply Z-Bind.

     In November 2004, our exclusively licensed NATS became available on Palm
OS(R) software, which powers the most powerful hand-held and smart phones and
has approximately 25 million users.

     In November, 2004 FiberGel Technologies held their first recipe contest for
recipes made with Z-Trim. In February, 2005 they announced the winners of
therecipe contest and awarded their prizes. The recipes were rated on
originality, taste, calorie and fat reduction, texture, visual appeal and
overall acceptance. The contest was designed to help make more people aware of
the benefits of Z-Trim.

                                       2
<PAGE>
     In December 2004, we launched a marketing initiative to highlight the
potential biohazard threat protections afforded by our ThraxVac technology. The
ThraxVac video, which demonstrates the technology's ability to collect and
eliminate anthrax and bacterial spores, will be used to demonstrate ThraxVac's
designed attributes to the Department of Defense and companies in the Homeland
Security industry interested in this preventive technology. The video was placed
on our web site at http://www.crgq.com/thraxvac/index.html for viewing by
potential customers and interested parties.

     In  December  2004,  FiberGel  Technologies  produced a new  version of its
Z-Trim  zero  calorie  fat  replacement   and  dietary  fiber   supplement  from
non-genetically  modified organism  (non-GMO) grain. We expect that the non-GMO
status will create  additional  interest  among leading food companies who offer
products in this area.

     In January, 2005, Circle Group signed a strategic consulting agreement and
closed a private placement of common stock with Greek businessman Stavros
Papageorgiou, the major shareholder and Founder of Sanyo Hellas Holding S.A., a
leading Greek conglomerate. Under the agreement, Mr. Papageorgiou will assist
Circle Group in marketing and distributing its products in Greece, forming
relationships with leading distribution partners and making introductions to
leaders in the Greek and international business communities.

     In February 2005, FiberGel Technologies, which holds all rights to Z-Trim
under existing license from the USDA, received additional patent protection in
Europe for it products. The USDA has accepted an 'Advance Notice of Grant' for
patent protection in Europe, including Austria, Belgium, Switzerland, Germany,
Denmark, Spain, Finland, France, Great Britain, Greece, Ireland, Italy,
Liechtenstein, Luxembourg, Monaco, Netherlands, Portugal and Sweden.

For  discussion of the  promissory  note for $960,000  received as payment for a
note receivable for a stock purchase please see Note 6.

SUMMARY OF FINANCIAL RESULTS

Total assets increased to $8,251,545 at March 31, 2005 from $7,957,409 on
December 31, 2004. This was primary the result of proceeds received from notes
receivable for stock subscription.

Total equity increased 24% to $7,244,643 on March 31, 2005 compared to
$5,833,958 for the year ended December 31, 2004.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2005 AS COMPARED TO THREE MONTHS ENDED MARCH 31,
2004

Revenues

Revenues decreased 4% for the three months ended March 31, 2005 from $124,559
for the three months ended March 31, 2004 to $119,599, as a result of a slower
demand in business consulting services, offsetting against increase in demand
for products from our e-tailer segment. The following table provides a breakdown
of the revenues for our divisions for the periods indicated:

                                         Three months ended March 31,
                                             2005           2004
                                           --------       --------
           Products                        $117,575       $111,662
           Services                           2,024         12,897
                                           --------       --------
        Total Revenues                     $119,599       $124,559
                                           ========       ========

                                       3
<PAGE>
Operating expenses

Operating expenses consist of payroll and related costs, insurance, occupancy
expenses, professional fees, and general operating expenses. Total operating
expenses decreased by $27,991 or approximately 2% to $1,550,068 for the three
months ended March 31, 2005 from $1,578,059 for the three months ended March 31,
2004.

Other income

Total other income for the three months ended March 31, 2005 was $13,228, as
compared to $13,551 for the three months ended March 31, 2004.

Net loss

Net loss decreased by $91,190 or 5.5% to $1,557,069 for the three months ended
March 31, 2005 as compared to a net loss of $1,648,259 for the three months
ended March 31, 2004. This was due to a combination of lower cost of sales and a
decrease in operating expenses, offsetting against lower sales.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2005, we had cash and cash equivalents of $505,496, compared to
$2,834,437 at March 31, 2004.

Net cash used by operating activities increased by 119% to $1,813,895 for the
three months ended March 31, 2005 as compared to net cash used by operating
activities of $827,105 for the three months ended March 31, 2004. The increase
resulted primarily from our net loss of $1,557,069, partially offset by
depreciation and amortization of $164,325, non-cash expenses of $516,942, and a
decrease from the change in liabilities over assets of approximately $916,439.

Net cash used by investing activities was $133,605 for the three months ended
March 31, 2005, as compared to net cash used by investing activities of $253,469
for the three months ended March 31, 2004. The decrease was due to lesser
additions of property and equipment for our manufacturing plant in current year.

Net cash provided by financing activities was $2,359,248 for the three months
ended March 31, 2005 compared to $2,531,293 for the three months ended March 31,
2004. Net cash provided by financing activities for the three months ended March
31, 2005 was primarily from the proceeds received from notes receivable for
stock subscriptions of $2,350,000. Net cash provided by financing activities for
the three months ended March 31, 2004 was primarily from sale of our stocks and
from exercising of options and warrants approximately of $2,537,548.

To successfully grow the individual segments of the business, the Company must
improve its cash position, and the revenue base of each segment, as well as
continue to succeed in its ability to raise additional capital through a
combination of public or private equity offerings, or strategic alliances. The
Company also depends on certain important employees, and the loss of any of
those employees may harm the Company's business.

GOING CONCERN QUALIFICATION

The Company's independent auditors have included an explanatory paragraph in
their review report on the March 31, 2005 consolidated financial statements
discussing issues which raise substantial doubt about the Company's ability to
continue as a "going concern." The going concern qualification is attributable
to the Company's historical operating losses and the amount of capital which the
Company projects it needs to satisfy existing liabilities and achieve profitable
operations. In positive steps, the Company has closed down its loss generating
businesses, and continues to evaluate and implement cost cutting measures at
every entity level. For the year ended March 31, 2005, the Company continued to
experience a negative cash flow from consolidated operations, and projects that
it will need certain additional capital to enable it to continue operations at
its current level beyond the near term. The Company believes that certain of
this needed capital will result from the successful collection of its accounts
receivable balances as the manufacturing plant is fully operating during the
coming fiscal year. The Company believes it can raise additional funds though
private placements of its common stock.

                                       4
<PAGE>
FACTORS THAT MAY AFFECT FUTURE RESULTS

The following risks are material risks that we face. If any of the following
risks occur, the business of the Company and its operating results could be
seriously harmed.

WE HAVE A HISTORY OF OPERATING LOSSES AND CANNOT GUARANTEE PROFITABLE OPERATIONS
IN THE FUTURE. ANY FAILURE ON OUR PART TO ACHIEVE PROFITABILITY MAY CAUSE US TO
REDUCE OR EVENTUALLY CEASE OPERATIONS.

We reported a net loss of $4,185,315 for the twelve months ending December 31,
2004 and a net loss of$1,557,069 for the three months ending March 31, 2005. At
December 31, 2004 and 2003, respectively, we reported accumulated deficits of
$27,027,830 and $22,910,055. If we continue to incur significant losses our cash
reserves may be depleted earlier than currently anticipated, and we may be
required to limit our future growth objectives to levels corresponding with our
then available cash reserves.

OUR SUCCESS IS DEPENDENT ON MARKET ACCEPTANCE OF OUR PRODUCT.

We have not conducted, nor have others made available to us, results of market
research indicating how much market demand exists for Z-Trim, our fat
replacement product. We are relying on the current concerns over obesity,
weight-health issues, and the rising cost of health care to drive demand for
ZTrim in the marketplace. We cannot assure you that we will be able to gain the
market acceptance necessary to achieve profitability.

WE MAKE NO PROJECTIONS REGARDING THE VIABILITY OF OUR FAT REPLACEMENT PRODUCT
AND WE CANNOT ASSURE YOU THAT WE WILL ACHIEVE THE RESULTS DESCRIBED.

We make no projection with respect to our future income, assets or business. No
expert has reviewed our business plan for accuracy or reasonableness. Our
business and results of operations will be materially harmed if Z-trim is not
widely accepted as a fat substitute. It is likely that our actual business and
results of operations will differ from those presented herein.

WE MAY NEED ADDITIONAL FUNDING AND SUCH FUNDING MAY NOT BE AVAILABLE. IF SUCH
FUNDING IS AVAILABLE, IT MAY NOT BE OFFERED ON SATISFACTORY TERMS.

We may require additional financing to fund ongoing operations if our sales and
revenue growth are insufficient to meet our operating costs. Our inability to
obtain necessary capital or financing to fund these needs will adversely affect
our ability to fund operations and continue as a going concern. Our inability to
obtain necessary capital or financing to fund these needs could adversely affect
our business, results of operations and financial condition. Additional
financing may not be available when needed or may not be available on terms
acceptable to us. If adequate funds are not available, we may be required to
delay, scale back or eliminate one or more of our business segments, which may
affect our overall business, results of operations and financial condition.

THE LOSS OF SERVICE OF KEY MANAGEMENT COULD HAVE A NEGATIVE IMPACT ON OUR
PERFORMANCE.

Our success depends to a significant degree upon the performance of our founder
and chief executive officer, Gregory J. Halpern. The loss of his services could
have a material adverse effect on our operating performance, prospects and
viability as a going concern.

OUR MANAGEMENT CURRENTLY BENEFICIALLY OWNS A SIGNIFICANT PERCENTAGE OF OUR
COMMON STOCK.

Ownership of Circle Group is concentrated in management. Gregory J. Halpern, who
owns 33.4% of the outstanding shares of our common stock, and all of the
directors and officers collectively own 45.9%. Holders of our common stock can
be out-voted by management in most circumstances and thereby management can
control the composition of our board of directors and our policies.

                                       5
<PAGE>
WE MAY EXPAND OUR OPERATIONS BY MAKING ACQUISITIONS WHICH COULD SUBJECT US TO A
NUMBER OF OPERATIONAL RISKS.

In order to grow our business, we may expand our operations by acquiring other
businesses in the future. We cannot predict whether or when any acquisitions
will occur. Acquisitions commonly involve certain risks, and we cannot assure
you that any acquired business will be successfully integrated into our
operations or will perform as we expect. Any future acquisitions could involve
certain other risks, including the assumption of additional liabilities,
potentially dilutive issuances of equity securities and diversion of
management's attention from other business concerns We may also enter into joint
venture transactions. Joint ventures have the added risk that the other joint
venture partners may have economic, business or legal interests or objectives
that are inconsistent with our interests and objectives.

OUR INABILITY TO SECURE AND PROTECT OUR INTELLECTUAL PROPERTY MAY RESULT IN
COSTLY AND TIME-CONSUMING LITIGATION AND COULD IMPEDE US FROM EVER ATTAINING
MARKET SUCCESS.

We hold several patents as well as copyrights and trademarks with respect to our
products and expect to continue to file applications in the future as a means of
protecting our intellectual property. In addition, we seek to protect our
proprietary information and know-how through the use of trade secrets,
confidentiality agreements and other similar security measures. With respect to
patents, there can be no assurance that any applications for patent protection
will be granted, or, if granted, will offer meaningful protection. Additionally,
there can be no assurance that competitors will not develop, patent or gain
access to similar know-how and technology, or reverse engineer our products, or
that any confidentiality agreements upon which we rely to protect our trade
secrets and other proprietary information will be adequate to protect our
proprietary technology. The occurrence of any such events could have a material
adverse effect on our results of operations and financial condition.

OUR STOCK PRICE MAY DROP UNEXPECTEDLY DUE TO SHORT SELLING OF OUR COMMON STOCK
IN THE MARKET.

     We have experienced and may continue to experience unexpected decline n our
stock price due to manipulation of the market by individuals who profit by short
selling our common stock. Short selling occurs when an individual borrows shares
from an investor through a broker and then sells those borrowed shares at the
current market price. The "short seller" profits when the stock price falls
because he or she can repurchase the stock at a lower price and pay back the
person they borrowed, thereby making a profit. We cannot assure you that short
sellers will not continue to drive the stock price down in the future, causing
decline in the value of your investment.

THE FLUCTUATION IN OUR STOCK PRICE MAY RESULT IN A DECLINE IN THE VALUE OF YOUR
INVESTMENT.

     The price of our common stock may fluctuate widely, depending upon many
factors, including the differences between our actual financial and operating
results and those expected by investors and analysts, changes in analysts'
recommendations or projections, short selling of our stock in the market,
changes in general economic or market conditions and broad market fluctuations.
Companies that experience volatility in the market price of their securities
often are subject to securities class action litigation. This type of
litigation, if instituted against us, could result in substantial costs and
divert management's attention and resources away from our business.

FORWARD-LOOKING STATEMENTS

     When used in this Form 10-QSB and in future filings by us with the
Securities and Exchange Commission, in our press releases or other public or
shareholder communications, and in oral statements made with the approval of an
authorized executive officer, the words "believes," "intends," "expects," "may,"
"will," "should," "plan," "projected," "contemplates," "anticipates," or similar
statements are intended to identify forward-looking statements. Our ability to
predict results or the actual effect of future plans or strategies are
uncertain.

     Factors which could have a material adverse effect on our operations
include, but are not limited to, market acceptance of Z-Trim, general economic
conditions, availability of additional financing on acceptable terms,
legislative/regulatory changes, competition, demand for financial services in
our market areas and accounting principles and guidelines. These risks and
uncertainties should be considered in evaluating forward-looking statements and
you should not place undue reliance on these forward-looking statements, which
apply only as of the date of this filing. We undertake no obligation to release
publicly the result of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date of this Form
10-QSB or to reflect the occurrence of unanticipated events.

                                       6
<PAGE>
ITEM 3. CONTROLS AND PROCEDURES

The Company's Chief Executive Officer and Chief Financial Officer have concluded
that the Company's disclosure controls and procedures (as defined pursuant to
Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934), based on
their evaluation of such controls and procedures as of the end of the period
covered by this report, are effective to ensure that information required to be
disclosed by the Company in the reports it files under the Securities Exchange
Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the Securities and Exchange
Commission and that such information is accumulated and communicated to the
Company's management, including its Chief Executive officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in the Company's internal controls over financial
reporting identified in connection with management's evaluation that occurred
during the Company's last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1. Unregistered Sales of Equity Securities and Use of Proceeds

     During the first quarter of 2005, we sold an aggregate of 336,090 shares of
our common  stock in  private  offerings  for  payment  of  services  generating
$253,110 in gross proceeds.  No  underwriters  participated in the offerings and
all shares  were  intended to be sold as part of an amendment  to the S-3 shelf
registration.

Date of Transaction         No. of Shares             Consideration

January  3, 2005                30,000               Payment of services
January  7, 2005               131,440               Payment of services
January  7, 2005                17,825               Payment of services
January 31, 2005                 2,475               Payment of services
February 28, 2005                4,350               Payment of services


ITEM 2. Circle Group Holdings, Inc. subsidiaries.

Subsidiary                    Date of Incorporation   State of Jurisdiction
FiberGel Technologies, Inc.      August, 2000              Florida
Z-Amaize Technologies, Inc.      October, 2003             Illinois
Thebraveway.com, Inc.            September, 2001           Illinois
Online Bedding, Inc.             January, 1980             Illinois



                                       7
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

 Exhibit No.                        Description
 -----------                        -----------

 3.1(i)          Articles of Incorporation of Circle Group Holdings, Inc.
                 [Incorporated by reference to Exhibit 2.1 to Circle Group's
                 Registration Statement on Form 10-SB]

 3.1(ii)         Bylaws of Circle Group Holdings, Inc. [Incorporated by
                 reference to Exhibit 2.2 to Circle Group's Registration
                 Statement on Form 10-SB]

10.1*            Gregory J. Halpern Employment Agreement [Incorporated by
                 reference to Exhibit 6.1 to Circle Group's Registration
                 Statement on Form 10-SB]

10.2*            Michael Theriault Employment Agreement [Incorporated by
                 reference to Exhibit 6.3 to Circle Group's Registration
                 Statement on Form 10-SB]

10.3*            Dana Dabney Employment Agreement [Incorporated by reference
                 to Exhibit 6.4 to Circle Group's Registration Statement on
                 Form 10-SB]

10.4             Circle Group Holdings,Inc. 1999 Stock Option Plan
                 [Incorporated by reference to Exhibit 6.6 to Circle Group's
                 Registration Statement on Form 10-SB]

10.5             Industrial Lease Agreement between CLO Enterprises and
                 Circle Group Holdings,Inc. dated May 20, 1999 [Incorporated
                 by reference to Exhibit 6.7 to Circle Group's Registration
                 Statement on Form 10-SB]

10.6             Industrial Lease Agreement between CLO Enterprises and
                 Circle Group Holdings,Inc. dated June 18, 1999 [Incorporated
                 by reference to Exhibit 6.8 to Circle Group's Registration
                 Statement on Form 10-SB]

* These agreements expired in 2002, the parties continue to perform services
pursuant to the terms of the agreements.


10.7             Promissory Note, Dated November 30, 2002, delivered by
                 Circle Group Holdings, Inc. in favor of Edward L. Halpern
                 [Incorporated by reference to Exhibit 6.11 to Circle Group's
                 Annual Report on Form 10-KSB for the year ended December 31,
                 2002]

10.8             Asset Purchase Agreement, dated August 27, 2002, by and
                 between Circle Group Holdings, Inc. and UTEK Corporation
                 [Incorporated by reference to Circle Group's Current Report
                 on Form 8-K filed on September 11, 2002]


                                       8
<PAGE>
10.9             Assignment of License Agreement between UTEK Corporation,
                 Circle Group Holdings, Inc. and Brookhaven Science
                 Associates dated March 26 2003 [Incorporated by reference to
                 Exhibit 10.14 to Circle Group's Form 10-QSB for the quarter
                 ending September 30, 2003]

10.10            Assignment of License Agreement between UTEK Corporation,
                 Circle Group Holdings, Inc. and University of Illinois dated
                 July 9, 2003 [Incorporated by reference to Exhibit 10.15 to
                 Circle Group's Form 10-QSB for the quarter ending September
                 30, 2003]

10.11            Assignment of License Agreement between Circle Group
                 Holdings, Inc. and Brookhaven Science Associates dated July
                 22, 2003 [Incorporated by reference to Exhibit 10.16 to
                 Circle Group's Form 10-QSB for the quarter ending September
                 30, 2003]

 21.1            Circle Group Holdings, Inc. Table of subsidiaries State of
                 Incorporation and Jurisdiction.

 31.1*           Statement Under Oath of Principal Executive Officer of the
                 Company Pursuant to Section 302 of Sarbanes- Oxley Act of
                 2002

 31.2*           Statement Under Oath of Principal Financial Officer of the
                 Company Pursuant to Section 302 of Sarbanes- Oxley Act of
                 2002

 32.1*           Statement Under Oath of Principal Executive Officer of the
                 Company Pursuant to Section 906 of Sarbanes-Oxley Act of
                 2002

 32.2*           Statement Under Oath of Principal Financial Officer of the
                 Company Pursuant to Section 906 of Sarbanes-Oxley Act of
                 2002

* Filed herewith


                                       9
<PAGE>

                          CIRCLE GROUP HOLDINGS, INC.
                                AND SUBSIDIARIES


                         Index to Financial Statements
                         -----------------------------


Consolidated Balance Sheet at
  March 31, 2005 (unaudited)........................................... F-1

Consolidated Statement of
  Operations as of March 31, 2005 (unaudited).......................... F-2

Consolidated Statements of
  Cash Flows as of March 31, 2005 (unaudited).......................... F-3

Notes to Interim Unaudited
  Consolidated Financial Statements.................................... F-4




<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)

MARCH 31, 2005


ASSETS
Current Assets
  Cash and cash equivalents                                  $    505,496
  Accounts receivable, net of allowance for bad debt
   of $0 and $6,096 for 2005 and 2004                              30,439
  Prepaid expenses and other assets                                63,906
  Inventories                                                     144,029
                                                             ------------
           TOTAL CURRENT ASSETS                                   743,870
                                                             ------------

Property and equipment, net                                     6,941,905

                                                             ------------

Other Assets
  Deposits                                                         11,103
  Purchased intangible assets, net                                554,667
                                                             ------------
                                                                  565,770
                                                             ------------

           TOTAL ASSETS                                      $  8,251,545
                                                             ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable                                           $    858,057
  Accrued expenses                                                 55,429
  Notes payable - related parties                                  25,000
  Capital lease obligations, current portion                       31,854
                                                             ------------
                                                                  970,340

Long-Term Liabilities,
  Capital lease obligations, net of current portion                36,562
                                                             ------------

          TOTAL LIABILITIES                                     1,006,902
                                                             ------------

Minority deficit                                                 (100,520)

Stockholders' Equity
  Common stock, $.00005 par value; 200,000,000 shares
   authorized; 44,749,559 shares issued and outstanding             2,237
  Common stock to be issued                                            23
  Additional paid-in capital                                   38,588,347
  Note receivable for issuance of stocks                       (1,115,000)
  Unamortized expenses                                         (1,534,276)
  Accumulated deficit                                         (28,584,899)
  Treasury stock, at cost                                         (11,269)
                                                             ------------
                                                                7,244,643
                                                             ------------

    TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY                $  8,251,545
                                                             ============

SEE NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                                      F-1

<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For three months ended March 31,                      2005             2004
- ------------------------------------------------------------------------------
Revenues:
  Products                                       $    117,575     $    111,662
  Services                                              2,024           12,897
--------------------------------------------------------------------------------
    TOTAL REVENUES                                    119,599          124,559
--------------------------------------------------------------------------------

Cost of revenues:
  Products                                            144,372          117,244
  Services                                             17,110          103,264
--------------------------------------------------------------------------------
    Total cost of revenues                            161,482          220,508
--------------------------------------------------------------------------------

Operating expenses:
  Selling, general and administrative               1,541,485        1,569,476
  Amortization of purchased intangible assets           8,583            8,583
--------------------------------------------------------------------------------
    Total operating expenses                        1,550,068        1,578,059
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
            OPERATING (LOSS)                       (1,591,951)      (1,674,008)
--------------------------------------------------------------------------------

Other income (expenses):
  Other income                                         13,000           17,445
  Interest income                                       3,709            2,231
  Interest expense                                     (3,481)          (6,125)
--------------------------------------------------------------------------------
    Total other income (expenses)                      13,228           13,551
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NET LOSS BEFORE MINORITY INTEREST                $ (1,578,723)    $ (1,660,457)
--------------------------------------------------------------------------------

Minority interest in losses of subsidiaries            21,654           12,198

--------------------------------------------------------------------------------
NET LOSS                                         $ (1,557,069)    $ (1,648,457)
--------------------------------------------------------------------------------
NET LOSS PER SHARE - BASIC AND DILUTED           $      (0.03)    $      (0.05)
--------------------------------------------------------------------------------

Weighted Average Number of Shares                  44,618,109       34,179,545


SEE NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENT


                                   F-2
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>

For three months ended March 31,                                          2005               2004
-----------------------------------------------------------------------------------------------------
<S>                                                                    <C>                <C>
Cash Flow From Operating Activities:
  Net (loss)                                                           $(1,557,069)      $(1,648,259)
  Adjustments to reconcile net(loss)to net cash used in operations:
   Minority deficit                                                        (21,654)          (12,198)
   Depreciation and amortization                                           164,325             6,476
   Amortization of non cash expenses                                       315,313           368,500
   Stocks and warrants issued for services                                 201,629           324,870
   (Increase) decrease in:
     Accounts receivable, net                                               56,026            17,815
     Prepaid expenses and other assets                                      36,642            15,487
     Inventories                                                           (28,287)            9,867
     Deposits                                                                                  (12)
   Increase (Decrease) in:
     Accounts payable and other liabilities                               (980,820)           50,349
-----------------------------------------------------------------------------------------------------
CASH FLOWS USED IN OPERATING ACTIVITIES                                 (1,813,895)         (827,105)
-----------------------------------------------------------------------------------------------------

Cash Flow From Investing Activities:
    Purchase of property and equipment                                    (133,605)         (253,469)
-----------------------------------------------------------------------------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES                                   (133,605)         (253,469)
-----------------------------------------------------------------------------------------------------

Cash Flow From Financing Activities:
 Net proceeds from sales of stock                                                            920,000
 Exercise of warrants and options                                           14,750         1,617,548
Proceeds from notes receivable for stock                                 2,350,000
Repayments on capital lease obligations                                     (5,502)           (6,255)
-----------------------------------------------------------------------------------------------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                              2,359,248         2,531,293
-----------------------------------------------------------------------------------------------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                  411,748         1,450,719

Cash and cash equivalents, at beginning of period                           93,748         1,383,718
-----------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD                            $   505,496       $ 2,834,437
-----------------------------------------------------------------------------------------------------

Supplemental Disclosures of Cash Flow Information:
      Interest paid                                                    $    (2,841)      $     6,125
Supplemental Schedules of Noncash Investing and Financing Activities:
  Issuance of common stock for liabilities  incurred
equipment purchase                                                     $   186,582       $         -
  Notes receivable incured for exercising of
warrants                                                               $         -       $   106,250


</TABLE>
SEE NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                                      F-3
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Circle Group Holdings, Inc. (the "Company") is a pioneer of emerging technology
companies. The Company provides small business infrastructure, funding and
substantial intellectual capital to bring important and timely life-changing
technologies to the marketplace through all phases of the commercialization
process.

The Company has participated in several public and private offerings and has
expanded its business. In 2002, the Company reorganized its business units into
three reportable segments: food product development, security product
development, and e-tailor and acquired FiberGel Technologies, Inc. ("FiberGel"),
which owns an exclusive license to Z-Trim, an all-natural, corn-based fat
replacement.

Circle Group operates through its FiberGel Technologies, Z-Amaize Technologies,
Mini-Raman Lidar Technology, ThraxVac Technology, The Brave Way Training
Systems, and On-Line Bedding divisions.

On March 31, 2004, the Company's common stock was approved to be trading on the
American Stock Exchange under the symbol, CXN.

A summary of significant accounting policies follows.

Presentation of Interim Information

The financial information at March 31, 2005 and for the three months ended March
31, 2005 and 2004 is unaudited, but includes all adjustments (consisting only of
normal recurring adjustments) that the Company considers necessary for a fair
presentation of the financial information set forth herein, in accordance with
accounting principles generally accepted in the United States ("U.S. GAAP") for
interim financial information, and with the instructions to Form 10-QSB and Item
310 (b) of Regulation S-B. Accordingly, such information does not include all of
the information and footnotes required by U.S. GAAP for annual financial
statements. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual Report on Form
10-KSB for the year ended December 31, 2004.

The results for the three months ended March 31, 2005 may not be indicative of
results for the year ending December 31, 2005 or any future periods.

Principle of Consolidation and Presentation

The accompanying consolidated financial statements include the accounts of
Circle Group Holdings Inc. and its subsidiaries after elimination of all
Inter company accounts and transactions. Certain prior period balances have been
reclassified to conform to the current period presentation.

NOTE 2 - GOING CONCERN

The Company's consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. In the near
term, the Company expects to continue to incur operating losses and may not have
enough money to grow its business in the future. The Company can give no
assurances that it will achieve profitability or be capable of sustaining
profitable operations. As a result, operations in the near future are expected
to continue to use working capital.

To successfully grow the individual segments of the business, the Company must
decrease its cash burn rate, improve its cash position and the revenue base of
each segment, and succeed in its ability to raise additional capital through a
combination of primary public or private equity offerings or strategic
alliances. The Company also depends on certain important employees, and the loss
of any of those employees may harm the Company's business.

The Company has generated approximately $2,364,750 in additional operating
capital during the first quarter of 2005 through sales of it's common stock in
exercising options and warrants, and proceeds from notes receivable for stock.


                                      F-4

<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------
NOTE 3 - INVENTORIES



                                   March 31,         March 31,
                                    2005              2004
                              ----------------  ----------------
Raw Materials                        $ 52,436           $   920
Work-in-process                         2,361                 -
Packaging and Display                  53,250               606
Finished Goods                         35,982             6,656
                              ----------------  ----------------
  Total inventories                 $ 144,029           $ 8,182
                              ================  ================


NOTE 4 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
                                                                   March 31,
                                                             2005                2004
                                                      -----------------   -----------------
<S>                                                        <C>                   <C>
Production, engineering and other equipment                $ 4,516,010          $  277,494
Leasehold improvements                                       2,629,400             611,530
Office equipment and furniture                                 595,832             600,310
Computer equipment and related software                        315,795             305,418
Construction in process - equipment                             56,407                   -
                                                      -----------------   -----------------
                                                             8,113,444           1,794,752
Accumulated depreciation                                    (1,171,539)           (861,089)
                                                      -----------------   -----------------
Property and equipment, net                                $ 6,941,905          $  933,663
                                                      =================   =================
</TABLE>
Depreciation expense was $155,742 and $37,893for the three months ended March
31, 2005 and 2004, respectively.

NOTE 5 - INTANGIBLE ASSETS


During the first three months of fiscal 2005, no significant identified
intangible assets were acquired and no identified intangible assets were
impaired. The following table present details of the Company's purchased
intangible assets:



                                   Gross
                                  Carrying     Accumulated
                                   Amount      Amortization      Net
     --------------------------- ------------  ------------- -------------
     License Rights to
      Developed Technology          $420,000      $ (42,000)     $378,000
      Website                        200,000        (23,333)      176,667
                                 ------------  ------------- -------------

       Total intangibles            $620,000      $ (65,333)     $554,667
                                 ============  ============= =============



Amortization of intangibles was $8,583 for the three months ended March 31, 2005
and 2004.

Based on the carrying amount of the intangibles as of March 31, 2005, and
assuming no impairment of the underlying assets, the estimated future
amortization is as follows:

                                      F-5
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------

           Years ended December 31,
           -----------------------------
           2005 (April 1 to December 31)                    $  25,749
           2006                                                34,333
           2007                                                34,333
           2008                                                34,333
           2009                                                34,333
           Thereafter                                         391,586
                                                         -------------

           Total amortization                               $ 554,667
                                                         =============


NOTE 6 - STOCKHOLDERS' EQUITY

Private Placement Offering

In March 2004, the Company conducted a self-underwritten offering of the
Company's common stocks up to $5 million. The stock was sold for $100,000 per
unit. Each unit consists of 22,222 shares of common stock and 22,222 warrants.
The warrants are exercisable at $6.00 per share and expire in three (3) years
after purchase of the above described unit. As of March 31, 2004, the Company
sold and issued 177,777 shares and received $920,000 in proceeds under the
offering.

Exercising of stock warrants and options

During the first quarter of 2005, there were 27,000 of stock warrants and
options exercised. The Company received total proceeds of $14,750.

During the first quarter of 2004, there were 3,828,590 of stock warrants and
options exercised. The Company received $1,617,548 in cash and a note receivable
of $106,250 upon exercising. The note was received in full in April 2004.

Note receivables for issued stock

As of March 31, 2005, the Company held a note receivable of $965,000 for stock
issued in 2004. The note bears zero interest and is in default. Management
elected to impose a payment plan on the debtor to avoid litigation. Through May
10, 2005, no subsequent payment was received.

The Company also has a note receivable of $250,000 for warrants exercised in
2004. The note carries an interest rate of 5% per annum and is pledged by the
stock. Principal and interest are due on June 30, 2006. A principal payment of
$100,000 was received as of March 31, 2005.

                                      F-6
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------


NOTE 7 - NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per
share:



  For Three Months ended March 31,                    2005           2004
  ------------------------------------------------- ------------ -------------
  Numerator:
  ------------------------------------------------- ------------ -------------
    Net loss                                        $(1,557,069)  $(1,648,259)
  ------------------------------------------------- ------------ -------------

  Denominator:
  ------------------------------------------------- ------------ -------------
    Weighted average number of shares outstanding    44,618,109    34,179,545
  ------------------------------------------------- ------------ -------------

  ------------------------------------------------- ------------ -------------
  Net loss per share-basic and diluted              $     (0.03)  $     (0.05)
  ------------------------------------------------- ------------ -------------


As the Company incurred net losses for the three months ended March 31, 2005 and
2004, the effect of dilutive securities totaling 2,140,340 and 6,117,568
equivalent shares, respectively, has been excluded from the calculation of
diluted loss per share because their effect was anti-dilutive.

NOTE 8 - STOCK OPTION PLAN

The Company has a Stock Option Plan (the Plan) effective January 2, 1999 and
amended in 2004, which provides for the issuance of qualified options to all
employees and non-qualified options to consultants and other service providers.
The Company accounts for this plan under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations. No stock-based employee compensation cost is reflected
in net loss, as all options granted under this plan had an exercise price equal
to the market value of the underlying common stock on the grant date. The
following table illustrates the effect on net loss and net loss per share if the
Company had applied the fair value provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee compensation.

<TABLE>
<CAPTION>

                                                                   Three Months ended
                                                                       March 31,
                                                                 2005             2004
---------------------------------------------------------   ---------------- ----------------
<S>                                                            <C>              <C>
Net loss, as reported                                          $ (1,557,069)    $ (1,648,259)

Deduct: Total stock-based employee compensation
 expense determined under the fair value of awards
 net of tax related effects                                         495,709          617,302
                                                            ---------------- ----------------

Pro forma net loss                                             $ (2,052,778)    $ (2,265,561)
                                                            ================ ================

Reported net loss per share-basic and diluted                  $      (0.03) -  $      (0.05)
                                                            ================ ================

Pro forma net loss per share-basic and diluted                 $      (0.05)    $      (0.06)
                                                            ================ ================
</TABLE>
                                      F-7
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------

NOTE 9 - RELATED PARTY TRANSACTION

In February 2004, the Chairman of the Board of Director exercised his 720,000
stock options at $0.05 per share, or aggregate of $36,000. The Company received
$8,000 in cash and the balance of $28,000 was charged as payments for his
service rendered.


NOTE 10 - WITHDRAWAL FROM REGISTRATION AS A BROKER-DEALER

On January 27, 2004, CGI Capital, Inc. filed an application of withdrawal from
registration as a broker or dealer. The application is subject to SEC approval.


NOTE 11 - GUARANTEES

The Company from time to time enters into certain types of contracts that
contingently require the Company to indemnify parties against third party
claims. These contracts primarily relate to: (i) divestiture agreements, under
which the Company may provide customary indemnifications to purchasers of the
Company's businesses or assets; (ii) certain real estate leases, under which the
Company may be required to indemnify property owners for environmental and other
liabilities, and other claims arising from the Company's use of the applicable
premises; and (iii) certain agreements with the Company's officers, directors
and employees, under which the Company may be required to indemnify such persons
for liabilities arising out of their employment relationship.

The terms of such obligations vary. Generally, a maximum obligation is not
explicitly stated. Because the obligated amounts of these types of agreements
often are not explicitly stated, the overall maximum amount of the obligations
cannot be reasonably estimated. Historically, the Company has not been obligated
to make significant payments for these obligations, and no liabilities have been
recorded for these obligations on its consolidated balance sheet as of March 31,
2005.

In general, the Company offers a one-year warranty for most of the products it
sold. To date, the Company has not incurred any material costs associated with
these warranties.


NOTE 12 - SEGMENT INFORMATION

The Company evaluates its reporting segments in accordance with SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information. The Chief
Executive Officer has been identified as the Chief Operating Decision Maker as
defined by SFAS No. 131. The Chief Executive Officer allocates resources to each
segment based on their business prospects, competitive factors, net sales and
operating results.

The Company currently reported four principal operating segments: (i) Food
Product Development, (ii) Security Training and Products, (iii) E-tailer, and
(iv) Business Consulting. The food product development segment owns the
exclusive, worldwide license to Z-Trim. The Security training offers cost
effective self-defense training courses and products with a uniquely targeted
curriculum. The e-tailer segment is a distributor of pillows, blankets, and
other bedding products. The business-consulting segment develops distinctive web
sites and provides business-consulting services for the Company's wholly owned
subsidiaries. The Company no longer reports segment information in the e-finance
and software development division. The Company also has other subsidiaries that
do not meet the quantitative thresholds of a reportable segment.

                                      F-8
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------


The Company reviews the operating companies' income to evaluate segment
performance and allocate resources. Operating companies' income for the
reportable segments excludes income taxes, minority interest and amortization of
goodwill. Provision for income taxes is centrally managed at the corporate level
and, accordingly, such items are not presented by segment. The segments'
accounting policies are the same as those described in the summary of
significant accounting policies.

Intersegment transactions: Intersegment transactions are recorded at cost.

Summarized financial information of the Company's results by operating segment
is as follows:
<TABLE>
<CAPTION>
                                                                           Three Months ended
                                                                                March 31,
                                                                         2005                  2004
        ------------------------------------------------------------------------------------------------
<S>                                                                  <C>                   <C>
        Net Revenue:
          Food Product Development                                   $      4,482          $     13,723
          Security Training and Products                                    1,595                 1,219
          E-tailer                                                        113,093                97,939
          Business Consulting                                                 429                11,678
        ------------------------------------------------------------------------------------------------
          Total Net Revenue                                          $    119,599          $    124,559
        ------------------------------------------------------------------------------------------------
        Operating Income (Loss):
          Food Product Development                                   $   (393,023)         $   (221,779)
          Security Training and Products                                    1,076                 1,018
          E-tailer                                                        (41,565)              (20,802)
          Business Consulting                                          (1,158,439)           (1,429,069)
        ------------------------------------------------------------------------------------------------
          Operating Loss                                             $ (1,591,951)         $ (1,670,632)
        ------------------------------------------------------------------------------------------------
        Net Income (Loss) Before Tax and Minority Interest:
          Food Product Development                                   $   (393,707)         $   (221,779)
          Security Training and Products                                    1,076                 1,018
          E-tailer                                                        (41,361)              (20,625)
          Business Consulting                                          (1,144,731)           (1,415,696)
                                                               -------------------   -------------------
        Net Loss by  Reportable Segments                             $ (1,578,723)         $ (1,657,082)
        All Other Net Loss                                                      -                (3,375)
        ------------------------------------------------------------------------------------------------
        Consolidated Net Loss Before Tax and Minority Interest       $ (1,578,723)         $ (1,660,457)
        ------------------------------------------------------------------------------------------------

                                                                           March 31,
                     Total Assets:                                  2005               2004
                     ---------------------------------------------------------------------------
                     Food Product Development                 $ 6,540,703           $   251,078
                     Security Training and Products                13,877                11,070
                     E-tailer                                      96,159               113,655
                     Business Consulting                        1,600,806             4,031,489
                                                              ------------          ------------
                                                                8,251,545             4,407,292
                     All Other Segments                                 -                21,280
                                                              ------------          ------------

                     ---------------------------------------------------------------------------
                     Consolidated Assets                      $ 8,251,545           $ 4,428,572
                     ---------------------------------------------------------------------------
</TABLE>
                                      F-9
<PAGE>


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        CIRCLE GROUP HOLDINGS, INC.
                                        (Registrant)
Date:  May 13, 2005
                                         By:  /s/ Gregory J. Halpern
                                              ----------------------------------
                                              Gregory J. Halpern, President and
                                              Chief Executive Officer

                                         By:  /s/ Dana L. Dabney
                                              ----------------------------------
                                              Dana L. Dabney, Chief Financial
                                              Officer




                                       10
<PAGE>




                     EXHIBIT INDEX- SEE PAGES 8 AND 9 ABOVE





                                       11